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Committee approves amendments to require separate fiduciary accounts and bankruptcy notice for third-party administrators
Summary
House Bill 2,044, as amended, would require third-party administrators to maintain separate fiduciary accounts to prevent commingling of multiple payers' funds and would require notice to the Commissioner of Insurance of any bankruptcy petition by a third-party administrator. The committee adopted two amendments and moved the bill out favorably.
House Bill 2,044 would require third-party administrators (TPAs) that hold funds on behalf of multiple payers to maintain separate fiduciary accounts so those funds are not commingled. The bill would also require the Commissioner of Insurance to be notified if a TPA files for bankruptcy.
Eileen (committee reviser) briefed the committee on the bill's substance. The committee adopted two amendments during the session: one changed the triggering language from "immediately" to "at the time such filing is made," and a second amendment replaced a cross-reference to "the statute book" with publication in the Kansas Register.
Senator Rose moved the first amendment (changing the timing language); Senator Warren seconded and the amendment passed by voice vote. Senator Fagg moved the Kansas Register amendment; Senator Rose seconded and that amendment also passed by voice vote. Following amendment adoption, a motion was made to move House Bill 2,044 as amended out of committee favorably; the committee approved the bill by voice vote.
The changes aim to protect payer funds held by TPAs and to ensure regulatory oversight in the event a TPA initiates bankruptcy proceedings.
